Lodinews.com

default avatar
Welcome to the site! Login or Signup below.
|
||
Logout|My Dashboard

Tips to Save for College

Print
Font Size:
Default font size
Larger font size

Posted: Thursday, July 10, 2014 10:00 pm | Updated: 1:33 am, Fri Jul 11, 2014.

(StatePoint) As thousands of high school graduates prepare for college, more than a few households are coping with “sticker shock” when it comes to higher education costs. And many students are leaving universities not only with a degree, but a mountain of debt.

However, decades of student loan payments don’t have to be in store for you or your child. With smart, long-term planning, this financial fate can be avoided.

“Anyone who anticipates paying for a college education at some point down the road should have a budget plan that includes a college savings fund,” says Diane Morais, the deposits executive at Ally Bank.

Regardless how far in the future your first tuition payment lies, consider these steps toward establishing a financial cushion:

• Do your homework on college costs: While it’s hard to predict future college costs, choose a school that might be an option and plan on an annual tuition increase of about five percent to get a ballpark idea. Don't be dissuaded by the amount you may have to save – with time on your side, much is possible.

• Budget for savings goals: Prioritize future college expenses as a monthly budget line item. The sooner you start saving the better, because even small amounts of money invested early can grow quickly through the power of compound interest.

• Consider safe, secure growth: Investigate options where your money can grow safely and securely, such as CDs. Also look for a bank with competitive interest rates and no maintenance fees, such as Ally Bank, which compounds interest daily and allows consumers to open an account with no minimum deposit.

Set up a dedicated account:  Create a college savings fund and pass the word to family members and others who may be interested in pitching in over time. Many banks allow customers to nickname accounts, such as “Billy’s college fund” and offer the ability to "link" individuals to make deposits into such accounts for those who prefer to give a gift with lasting value.

Automate your savings: Use direct deposit or recurring fund transfers to put a portion of your income into college savings automatically. With every raise or bonus, increase this amount.

Divert unnecessary expenses: Premium cable channels, magazine subscriptions and fast food costs can be considered extra and might be better spent when put toward a college fund. For more budgeting tips, visit www.AllyWalletWise.com.

• Investigate all your options: See if your employer or state offers tax-deferred savings plans for college. Take advantage of opportunities that are right for you and your family.

• Preserve other savings: College is expensive, but students have more sources of money for college than you will for retirement, so don’t dip into your 401(k) or other retirement savings. Many accounts charge a penalty for access and you’ll be harming your own possibility of a comfortable retirement.

Don’t wait until your child is graduating high school to worry about college expenses. The sooner you start planning, the better position you’ll be in when this critical time arrives.

*****

Photo Credit: (c) GemPhotography - Fotolia.com

Rules of Conduct

  • 1 Use your real name. You must register with your full first and last name before you can comment. (And don’t pretend you’re someone else.)
  • 2 Keep it clean. Please avoid obscene, vulgar, lewd, racist or sexually oriented language.
  • 3 Don’t threaten. Threats of harming another person will not be tolerated.
  • 4 Be truthful. Don't lie about anyone or anything. Don't post unsubstantiated allegations, rumors or gossip that could harm the reputation of a person, company or organization.
  • 5 Be nice. No racism, sexism or any sort of -ism that is degrading to another person.
  • 6 Stay on topic. Make sure your comments are about the story. Don’t insult each other.
  • 7 Tell us if the discussion is getting out of hand. Use the ‘Report’ link on each comment to let us know of abusive posts.
  • 8 Share what you know, and ask about what you don't.
  • 9 Don’t be a troll.
  • 10 Don’t reveal personal information about other commenters. You may reveal your own personal information, but we advise you not to do so.
  • 11 We reserve the right, at our discretion, to monitor, delete or choose not to post any comment. This may include removing or monitoring posts that we believe violate the spirit or letter of these rules, or that we otherwise determine at our discretion needs to be monitored, not posted, or deleted.

Welcome to the discussion.

Poll

Loading…

Your News

News for the community, by the community.

Featured Events

Mailing List

Subscribe to a mailing list to have daily news sent directly to your inbox.

  • Breaking News

    Would you like to receive breaking news alerts? Sign up now!

  • News Updates

    Would you like to receive our daily news headlines? Sign up now!

  • Sports Updates

    Would you like to receive our daily sports headlines? Sign up now!

Manage Your Lists